{"id":3838,"date":"2021-11-04T05:00:18","date_gmt":"2021-11-04T10:00:18","guid":{"rendered":"https:\/\/nwiloanguy.com\/blog\/why-a-wave-of-foreclosures-is-not-on-the-way\/"},"modified":"2024-01-18T20:52:07","modified_gmt":"2024-01-19T02:52:07","slug":"why-a-wave-of-foreclosures-is-not-on-the-way","status":"publish","type":"post","link":"https:\/\/nwiloanguy.com\/blog\/why-a-wave-of-foreclosures-is-not-on-the-way\/","title":{"rendered":"Why a Wave of Foreclosures Is Not on the Way"},"content":{"rendered":"

\"Why<\/p>\n

With forbearance plans coming to an end, many are concerned the housing market will experience a wave of foreclosures similar to what happened after the housing bubble 15 years ago. Here are a few reasons why that won\u2019t happen.<\/p>\n

<\/span><\/p>\n

There are fewer homeowners in trouble this time<\/strong><\/h4>\n

After the last housing crash, about 9.3 million households<\/a> lost their homes to a foreclosure, short sale, or because they simply gave it back to the bank.<\/p>\n

As stay-at-home orders were issued early last year, the fear was the pandemic would impact the housing industry in a similar way. Many projected up to 30% of all mortgage holders<\/a> would enter the forbearance program. In reality, only 8.5% actually did, and that number is now down to 2.2%.<\/p>\n

As of last Friday, the total number of mortgages still in forbearance stood at 1,221,000. That\u2019s far fewer than the 9.3 million households that lost their homes just over a decade ago.<\/p>\n

Most of the mortgages in forbearance have enough equity to sell their homes <\/strong><\/h4>\n

Due to rapidly rising home prices over the last two years, of the 1.22 million homeowners currently in forbearance, 93% have at least 10% equity in their homes. This 10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing the hit on their credit that a foreclosure or short sale would create.<\/p>\n

The remaining 7% might not have the option to sell, but if the entire 7% of those 1.22 million homes went into foreclosure, that would total about 85,400 mortgages. To give that number context, here are the annual foreclosure numbers<\/a> for the three years leading up to the pandemic:<\/p>\n